What is backtesting

Beginner Questions
1

What actually is backtesting? How to do that? I am using mt4 platform. Thanks

1 Like
2

Many Youtube videos explain how to use the build-in back testing program. From what I gather, it runs backtests on trading robots (EAs). As a manual/discretionary trader, what I do to backtest is: Uncheck the auto scroll button (green arrow, inside of what look to be an “L”) / scroll the chart back to look for patterns in price and indicators / scroll forward, candle by candle, to test yourself (your system) in price direction.

NOTE: To dig deeper into a specific point in time, make a horizontal line there. Now select other time frames and scroll to that line. I use H1, M15 and M5 a lot. Will mark the H1 / Scroll the horizontal line is to the left of the screen / Go to M15 / scroll a little to the right and there it is! The line / Scroll the horizontal line is to the left of the screen / Go to M5 / scroll a little to the right and there it is! The line.

3

You can get a brief idea about back testing program from internet. You can ask it in YouTube or Google it. Let me give a jest information. It is usually use as backtests for trading robots. What I do to backtests in my trading I just uncheck the auto scroll button or if you wanted to look patterns in price or indicators you can scroll the chart. Again there is a way to do backtests by scroll forwarding. By doing this you can test your system in price direction.

4

Here is the explanation
http://thetraderfx.blogspot.hr/2013/05/when-is-your-expert-advisor-ready-for.html

5

You can use your Mt4 trading platform for back testing! I seem, back testing is much useful than long time demo practicing!

6

Hello All - I have a question about BACKTESTING.

Is it always best to backtest your strategies/indicators and Price Action on a completely RANDOM currency pair or basically some security you’ve never traded before?? I ask this, because if it’s a security you’ve NEVER traded before I’m assuming you’ll have less of an idea of it’s over all direction?? For example, if you always have always USD/CAD pair you will already have an idea of its direction.

Also, should I backtest on multiple-time frames, but especially a lower time frame such as 15 min, 30 min or 1 hour so that I can actually see some movement in the day and test my strategies?? What are the advantages of multi-time frame analysis??

Any advice would be appreciated.

Thanks in advance.